Shell sells Australian refinery to Vitol

Energy giant Royal Dutch Shell is to sell as many as 870 service stations and its Australian refinery to Swiss oil company Vitol. The deal is worth approximately $2.6 billion, Shell announced Friday.

According to the company statement, Vitol will also take over Shell Australia's bulk fuels, bitumen, chemicals and part of its lubricants business. However, Shell will keep its aviation fuel operations in the country. The deal follows Shell's global shift in focus away from downstream operations, announced recently. Previously, the company had already started divesting refineries across Europe after reporting disappointing results over the past few quarters, particularly in its refining operations.

Shell's chief executive Ben van Beurden commented that Australia would remain a key market for the company and the branding on the service stations would remain unchanged. Shell has had to make some difficult portfolio choices in order to improve its global competitiveness, he said. Meanwhile, the company is convinced that Vitol will continue to invest in and expand the business, van Beurden stated.

Shell's Geelong refinery in Victoria has been in operation since the 1950s and has a maximum capacity of 120,000 barrels per day, meeting about 50 percent of the fuel demand in the state and about one-third of the demand in South Australia. The vast majority of employees currently working at the facility will keep their jobs under the new management.